As you are likely aware, Canada and the United States have agreed to sign a new trade agreement to replace the existing North American Free Trade Agreement.
The agreement, which includes Mexico as well, was concluded just before the deadline. The agreement is referred to as the United States-Mexico-Canada Agreement or USMCA for short. A copy of the agreement which includes chapter 20 dealing with intellectual property rights is available here.
In a joint statement on behalf of both Canada and the United States it was said that “Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region. It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home. We look forward to further deepening our close economic ties when this new agreement enters into force.”
The scope of the agreement is broad and my focus is limited to a high level review of the intellectual property provisions that Canada will or may have to change in order to comply. However, the following matters stand out:
Trademarks
a) Well-known Trademarks
The USMCA contains article 20.C.5 recognizing the importance of protecting well-known trademarks. In the past there has been some debate concerning the level of protection made available to famous trademarks in Canada. Presumably the article is directed at this issue.
b) Geographical Indications
The parties recognize in article 20.E.1 that geographical indications may be protected under their respective Trademark systems, subject to procedural safeguards for their recognition. When Canada entered into the CETA treaty, a significant number of geographical indications were protected under the Trademarks Act without any obligation for advertisement or opposition and insulated from subsequent attack. The Agreement precludes such a course of action in the future.
c) Statutory Damages for Counterfeiting
Article 20.J.4(7) provides that in cases involving trademark counterfeiting pre-established damages must be available at the election of the trademark owner if a party does not make exemplary or punitive damages available. If exemplary or punitive damages are available, there is no mandatory requirement for pre-established damages. Hopefully, when Canada passes legislation to implement the requirements of the USMCA, it will provide for pre-established damages in any event.
Patents
a) Patent Term Restoration
If there are unreasonable delays in a Party’s issuance of a patent, that Party must under Article 20.F.9 provide the means to, and at the request of the patent owner shall, adjust the term of the patent to compensate for such delays. An unreasonable delay, at least, shall include a delay in the issuance of a patent of more than five years from the date of filing of the application in the territory of the Party, or three years after a request for examination of the application has been made, whichever is later. A Party may exclude from the determination of such delays, that do not occur during the processing of, or the examination of, the patent application by the granting authority; periods of time that are not directly attributable to the granting authority; as well as periods of time that are attributable to the patent applicant.
b) Biologics
With regard to protecting new biologics a Party shall, pursuant to Article 20.F.14, with respect to the first marketing approval in a Party of a new pharmaceutical product that is or contains a biologic, provide effective market protection for a period of at least ten years from the date of first marketing approval of that product in that Party.
Copyright
a) Term of Protection
The term of protection for works subject to copyright must be extended under Article 20.H.7 to the life of the author and seventy years. There are additional equivalent provisions for extending the term of protection for works where the term is not based on the life of the author.
b) Safe Harbours
The USMCA establishes under Article 20.J.11 copyright safe harbours to provide protection for legitimate online enterprises operating as intermediaries that do not directly benefit from infringement. However, the Annex to Section J appears to permit Canada to maintain its current notice-and-notice regime.
c) Rights Management Information (RMI)
Under Article 20.H.12 each Party shall provide that any person that, without authority, and knowing, or having reasonable grounds to know, that it would induce, enable, facilitate or conceal an infringement of the copyright or related right of authors, performers or producers of phonograms: (i) knowingly removes or alters any RMI; (ii) knowingly distributes or imports for distribution RMI knowing that the RMI has been altered without authority; or (iii) knowingly distributes, imports for distribution, broadcasts, communicates or makes available to the public copies of works, performances or phonograms, knowing that RMI has been removed or altered without authority, is liable and subject to civil and administrative procedures and remedies.
In addition, each Party shall provide for criminal procedures and penalties to be applied if any person is found to have engaged willfully and for purposes of commercial advantage or financial gain in any of the above activities.
Trade Secrets
a) Legal Means of Protection
Under Section I each party shall ensure that persons have the legal means to prevent trade secrets lawfully in their control from being disclosed to, acquired by, or used by others (including state-owned enterprises) without their consent in a manner contrary to honest commercial practices. In addition, each party shall provide for criminal procedures and penalties for the unauthorized and wilful misappropriation of trade secrets.
b) Enforcement
Each Party has also confirmed under Article 20.J.1 that the enforcement procedures shall be available to the same extent with respect to acts of trademark infringement, as well as copyright or related rights infringement, in the digital environment. Since enforcement procedures with national effect are available in the Federal Court for trademarks and copyrights, presumably similar procedures should be made available for trade secrets.
Special Requirements related to Border Measures
Under Article 20.J.6(5) each Party shall provide that its competent authorities may initiate border measures ex officio against suspected counterfeit trademark goods or pirated copyright goods under customs control that are: (a) imported; (b) destined for export; (c) in transit; and (d) admitted into or exiting from a free trade zone or a bonded warehouse. In general terms an “in-transit” good means a good that is under “Customs transit” or “transshipped.”
The Impact of the US Midterm Elections
When the USMCA was negotiated, the US Republican party controlled both the House of Representatives and the Senate. After the elections the US Democratic party controls the House of Representatives. The House and the President disagree on virtually every issue. It has been suggested that, in order to obtain democratic support for the USMCA, additional assurances and perhaps changes may be required.
It will be interesting to see how implementation of the USMCA progresses. While the resolution of the lengthy negotiations removes a significant amount of uncertainty for the citizens and businesses of Canada and the United States, there still may be problems to be overcome.
If you have any questions or concerns please contact me at mckeown@gsnh.com.
Goldman Sloan Nash & Haber LLP
480 University Avenue, Suite 1600
Toronto, Ontario M5G 1V2
Direct Line: (416) 597-3371
Fax: (416) 597-3370
Email: mckeown@gsnh.com
These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.